EU prepared for 'every scenario' after Trump car tariff threat

YEREVAN: EU chief Ursula von der Leyen said Tuesday the bloc is “prepared for every scenario” after US President Donald Trump threatened to hike levies on European cars.

Trump vowed Friday to raise tariffs on EU cars and trucks from 15 to 25 percent, accusing the bloc of reneging on a trade accord struck last year – a charge von der Leyen rejected.

“A deal is a deal, and we have a deal,” the European Commission president told reporters in Yerevan. “We are both implementing this deal while respecting the different democratic procedures we have on both sides.”

The European Parliament has given conditional approval to the EU-US trade pact, but a final version still needs to be negotiated with the bloc’s member states.

READ MORE: Trump says he will raise tariffs on EU autos to 25%

The EU’s trade chief Maros Sefcovic is to hold talks in Paris Tuesday with US Trade Representative Jamieson Greer, who has complained about a “very slow” EU approval process as well as amendments that would “limit the deal”.

“The president decided that if the Europeans aren’t implementing the deal right now, then we don’t have to implement all of it either at this time,” Greer said Monday.

The European Commission, which leads trade policy for the 27-nation EU, has made clear it is keeping its options open should Trump’s new car tariffs kick in, without speculating on what action it might take.

Macron demands ‘bazooka’

But French President Emmanuel Macron, also in Armenia on a state visit, said Tuesday the bloc should be ready to activate its powerful anti-coercion instrument (ACI).

Slamming the US president for brandishing “threats of destabilisation”, Macron said the EU had “equipped itself with instruments that would then have to be activated, because that is precisely what they are for”.

Key EU power France has repeatedly pressed for the bloc to unleash the potent ACI trade tool, should Trump make good on successive trade threats aimed at European countries.

The EU has never deployed the instrument, aimed at dissuading countries from exerting geopolitical pressure on the bloc.

Dubbed the EU’s “bazooka”, it allows for a range of responses from tariffs on US goods to curbs on the export of strategic goods and the exclusion of American firms from tenders in Europe.

Last year’s trade deal capped US tariffs at 15 percent on most EU goods, including cars – lower than the 25 percent Trump imposed on vehicles from many other trading partners.

The commission insists it remains committed to the accord.

“On the European Union side, we are now in the final stages of implementing the remaining tariff commitments,” said von der Leyen.

“At the same time, the US has the commitment – for example where alignment with the agreed ceiling is still outstanding,” she said.

“So we want from this work mutual gain, cooperation and reliability – and we are prepared for every scenario.”